2009-12-10 10:22:35 - Bangladesh Agribusiness Report Q1 2010 - a new market research report on companiesandmarkets.com

www.companiesandmarkets.com/Summary-Market-Report/bangladesh-agr ..

As in other Islamic countries in the region, Bangladeshi consumers were hit by rapidly rising prices for staple food products in the run up to - and beyond - the holy month of Ramadan, which began on August 21 and ended with Eid ul-Fitr on September 20. Sugar and eggs saw some of the most dramatic spikes in price - the price of sugar rose by more than 50% in many places from the beginning of August to mid- September.

Unscrupulous traders and wholesalers are usually quickly blamed for the rapid price rises. While market manipulation is bound to contribute to the problem, more to blame is likely to be poor distribution networks and a tightly controlled market unable to react

 

 

to the spikes in demand. These problems are likely to persist in coming years, despite government measures to keep a lid on prices and prosecute those who break the rules.

The festivities certainly contributed to the rise in rice prices in mid to late 2009. We expect, however, that prices will remain high going into 2010. The world rice market is likely to be tighter in 2010 as major producers India, Pakistan and the Philippines all see their crops fall. On the domestic front, the poor monsoon is also likely to see a fall in the Aman rice crop and put upward pressure on prices. This will no doubt be good for farmers who managed to sow their fields on time despite the lack of rain, but could see consumers struggle once again. Despite high stocks from the bumper 2009 crop, the government is keeping a tight lid on exports allowing only a small amount of high-value aromatic rice to leave the country.

There was good news for the country´s long-term food security with successful tests of new rice varieties resistant to total submersion. The tests showed that after submersion under flood waters for up to 16 days, the rice still had satisfactory yields. This could see a sharp increase in productivity in the approximately 20% of Bangladesh´s rice fields that are prone to flooding. The Bangladesh Rice Research Institute said the seeds could be available commercially as early as 2010. A variety with a high tolerance for saline soil conditions is also on the way. In the longer term, a gene recently isolated by scientists in Japan could in the coming years lead to new rice breeds that can be submerged for even longer. The ´snorkel´ gene allows for rapid stem elongation when the plant is submerged, raising the possibility of rice that could survive weeks under floodwater that previously would have destroyed the crop.

If the fears about climate change in Bangladesh prove well founded, innovations like these will be increasingly necessary to ensure the country can feed itself. Improvements in agriculture alone, however, will likely not be enough. The government needs to work on improving growth outside the agricultural sector and building a more vibrant and broad-based rural economy.